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Federal budget fails to provide real help to Canadian media, industry officials warn

OTTAWA—The federal government will pump $50 million into local journalism but industry advocates say it falls short of the infusion needed to help Canadian media transition to a digital future.

As the Star first reported, Tuesday’s budget pledged $10 million a year over the next five years — to be handed out by one or more organizations independent of government — to support local journalism in underserved areas.

Heritage Minister Mélanie Joly had hinted that the federal budget would deliver some assistance to news outlets. The budget provides $50 million spread over five years. (Fred Chartrand / THE CANADIAN PRESS)

As well, over the next year, the government will look at new models to enable private giving and philanthropic support for non-profit journalism and local news.

But the government’s budget response “falls well short” of acting on recommendations presented to the government by a parliamentary committee and a detailed report by the Public Policy Forum to address the “crisis” in Canadian media that has seen newsrooms shuttered.

John Hinds, president and CEO of News Media Canada, an industry association which represents print and digital media, said he was “disappointed” by the lack of support and said it won’t prevent more newspaper closures.

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“We are concerned that the amount announced is far too little to address the growing challenge of providing local news,” Hinds said in a statement.

News Media Canada had proposed remaking the Canadian Periodical Fund into the Canadian Journalism Fund and giving it a new mandate to support local journalism, along with $350 million in funding.

“We are concerned that the focus of the funding announcement is on communities that have already lost newspapers and are now underserviced, rather than on supporting existing newspapers and their journalists to allow them to continue to provide local news in their communities,” Hinds said.

The annual investment proposed by the government is about the cost of running a single newsroom in a mid-sized community, Hinds said. Having to spread that among many Canadian communities means there’s not enough to support local news, he said.

Former journalist and academic Paul Adams said the budget measures seem to signal that the government appears ready to let market forces run their course, even if it means the demise of some outlets.

“They’ve decided they’re not interested in saving the newspaper industry . . . they’re going to let it die and they’re putting in place the structures to pick up the pieces,” said Adams, a former journalist at CBC News and the Globe and Mail who is now an associate professor at Carleton University’s School of Journalism.

“They’re looking past the existing industry to establish some kind of policy framework to cope with the day after,” Adams said in an interview.

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The issue comprised just two paragraphs in the 367-page budget document. And it was silent on remedies endorsed by the industry, such as no longer allowing advertisements bought on foreign-owned websites like Google, Facebook and the New York Times to be tax deductible.

That “loophole” encourages billions of dollars in ads to flow to foreign internet sites at the expense of Canadian media outlets, said the Friends of Canadian Broadcasting.

“Ottawa’s inaction on this file is pushing Canadian media and journalism closer to the brink. This threatens our civic discourse and with it, our very democracy,” said Ian Morrison, spokesperson for the organization.

However, the Canadian Taxpayers Association voiced concern about support that Ottawa did put on the table.

“Our position is pretty clear across the board. We just don’t support this sort of thing, regardless of the industry,” said association president Aaron Wudrick.

He said there’s potential that the media outlets that do receive federal funding could be “compromised” by the financial support.

“So if there’s any good news here, it’s that the subsidy is not that substantial. . . . We'll wait and see the details. But in general we oppose corporate welfare,” Wudrick said in an interview.

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